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Bank of England raises base rate

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The Bank of England has voted to raise the base rate to 0.5 per cent, the first increase in more than ten years.

The base rate was formerly 0.25 per cent, having been cut from 0.5 per cent in August 2016.

The Bank’s monetary policy committee voted seven to two to raise the rate.

The Bank’s two deputy governors, Jon Cunliffe and Dave Ramsden, voted against the rise.

Expectation had been rising that the MPC would raise the rate to help tackle rising inflation.

Predictions of a rise in base rate led many mortgage lenders to increase their own pricing in previous months.

Coreco director Andrew Montlake says: “After a number of false starts the Bank of England have finally acted and raised interest rates for the first time in a decade.

“In truth, the Committee had no choice to act in order to maintain credibility after a change in their rhetoric due to inflation remaining stubbornly above target, low unemployment figures and recent GDP figures showing an improvement, albeit a slight one.”

More to follow.

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